Advice for buying in USVI

So my husband and I have been to BVI and Jost a few times and just love the area. Our goal is to have a place in the islands when we retire in less then 20 years. Our son is just entering Kindergarten.
We would love to buy something now as an investment property, renting it out the majority of the time with maybe a week or two for us to use each year.
Can this be done? Or are we just crazy? We now live in New York so we really want something turn key if possible. I had seen some condos have management services.
We also think it would be easier to own in the USA instead of BVI.
Thank you in advance!
Patty

you can try Kirk Boeger at www.stthomasre.com I don't have his number. He is a realtor and property manager

First, go to www.vimovingcenter.com - lots of useful information there - so much so it will take weeks to read everything. There's also a very active forum there that has tens of thousands of threads that will answer all your questions plus hundreds more you haven't even though of yet.

Now, to answer your specific question: Yes, you can purchase a rental property in the USVI's and yes, you'd be wise to buy one with on-site management or you'll need to hire a local property manager. Now, most property owners will tell you that you probably won't be able to rent out your unit for the majority of the year unless you find a long term (say 1 year or longer) renter which then precludes you from using the property yourself. The really is more like 15 to 20 weeks rentals each year. Almost everyone I know who rents out their island homes just break even or lose a little on the rentals rather than make very much money. The income helps off-set carrying costs not fully cover them. Best to talk with your Tax advisor or CPA for more information how owning a vacation rental will affect your taxes.

One other thing to consider, if you buy a vacation home now and rent it out for the next 20 years what you'll have when you retire? You'll have a 20+ year old dwelling, that has had lots of wear & tear in a harsh tropical environment. Renters are notorious for abusing property that is not theirs. The sit on furniture with wet bathing suits, they run the a/c 24/7 even when they are "out", the sun & salt air play havoc with fabrics, appliances, paints and finishes. Expect to replace furniture, carpeting, appliances, upholstery, etc 2 to 3 times more often that you do "back home'.

Be careful before venturing into this type set up - do your research first hand, do not rely on promises of others or solely upon what you read on the internet.

You might be much better off, saving your hard earned money and doing some conservative "normal investments" to build your nest egg so you can purchase a newer or even brand new home when you are ready to retire.

Good luck following your dream.

I think it will be challenging to break even, not counting any tax benefits you may receive. You might look at VRBO to get an idea of the market. In my mind when I hear the term "investment property" it sounds like someone expects to make an income. Then when it goes to vacation property you are into another field. Yes there are investment properties that make money here but they are typically multi-family dwellings with 3 or more tenants. Those properties are in places where I wouldn't wish to vacation, inland and rough neighborhoods. The Movingcenter suggestion is a good idea. Speaking with your accountant is sound advice as well. We had some friends try to use VRBO for their beautiful condo but they gave up after a year. Cleaning and maintenance fees ended up costing more than just shuddering it when they were gone. Good luck to you.

Just recalled they got a $1500 utility bill when somebody rented their condo for 3 weeks apparently trying to make ice with the air conditioning. Vacationers can empty a cistern pretty fast too. They don't understand that there isn't an endless supply attached to the faucet.

I agree with investigating vimovingcenter.com. There are also condominium associations that have on-site property management and they control access. I know vrbo is very popular, but I feel there are huge problems with it.

Nutmeg--what would you say are the 'huge problems' with VBRO?

As an condo owner, I want to know who the people are around me. With vrbo, there can be multiple cleaning people and "agents" on the property. Even the guests- what if their behavior is inappropriate (too loud, too drunk, etc.)? Who goes over to ask them to simmer down? I prefer a bit more oversight on security. <img src="http://www.traveltalkonline.com/forums/images/graemlins/Wink.gif" alt="" />

Thank you everyone for your feedback. I will definitely check out the the vimoving website. I don't think we are thinking we will really turn a profit on this. I would consider it a second home that I would rent out to help cover the costs. Our thought process would be to get a foothold in the islands and maybe just trade up when we are ready to retire. A girl can dream, can't she? <img src="http://www.traveltalkonline.com/forums/images/graemlins/Grin.gif" alt="" />

VRBO is a rental agency, it is not a management agency. It brings renters and owners (or their managers) together. The property owners and their managers are responsible for turnaround, maintepainence and so forth. They are also responsible for guest screening, check in and check out and complaints. Don't blame VRBO, they are a great tool and provide clients for referral and commission fees far lower than full time, so called professional, vacation rental agents with physical brick and mortar offices on island.

unreg: Yes, all that is true. But if I live in a condominium community, I don't want all those random people on the property. A management company run by the association gives me a bit more protection. It is all a matter of perspective. What is good for an individual owner who is on island 1 week a year is different from someone who is a resident. <img src="http://www.traveltalkonline.com/forums/images/graemlins/handshake.gif" alt="" />

Actually, what is good for the resident IS good for the off-island owner, they just may not see it the same way. <img src="http://www.traveltalkonline.com/forums/images/graemlins/Wink.gif" alt="" />

I have owned a codo on one of the nicest beaches in the Caribbean for nearly 30 years. I have never even come close to breaking even or making money.

Rentals take a lot of time and effort and are like a second job

Electric bills can easily exceed $1000/month. Water bills are in the $300/month range unless a toilet is running or a faucet leaking and if that happens it is more like $1000.
Assesments of $10,000 are not at all rare and that is on top of monthly dues of $1400/month.

Be sure you can afford that and sustain a negative cash flow.

Yet if I had to do it over again I would still buy when I did. The place is very special for me and my family and we have gotten a great deal of pleasure from owning it.

I have to say we currently own a home on an island and do well, it covers mortgage, utilities, all costs and then some.

So far not been through a hurricane.

I would say if you buy at the right price you would be just fine.

Assume utilities will be 5 times what it will be for a similar sized home in the States, everything else triple your budget, and then some.

Sincerely,
Sonal

sonal,
I agree. We covered our maintenance and expenses when we owned in SXM.
Pay the right price and get a manager to run it.
Worked out very well for us.
cheers
irina